1. You are considering a 20 year, $1,000 face (par) value bond with a 10 percent annual coupon. The bond pays interest semi-annually. What is the current yield to maturity on the bond if the bond is selling for $1197.93? (State answer in annual percentage rate.)
cy = _______ py = ________ End or Bgn mode ______
N_______________
FV______________
PMT____________
PV_____________
I/Y = _
2. A restaurant is contemplating replacing its service staff with an electronic ordering process. Installing computers at each table will cost $150,000, but is expected to generate a cost savings of $40,000 per year for the next 10 years, when the computers will need to be replaced. If the restaura nt has a cost of capital of 10%, what is the NPV of this investment?